Consumer reaction to green subsidy phase-out in China: Evidence from the household photovoltaic industry

With the impending post-subsidy era, the Chinese government has initiated significant reductions in household photovoltaic (PV) subsidies. This policy change may have negative implications, such as the emergence of the “solar rush” phenomenon. This study aims to quantify the impact of the phase-out of photovoltaic generation subsidies on household electricity consumption in China. We collected electricity usage data from 3620 Chinese households, and our results indicate that the announcement of subsidy phase-out led to a larger rebound effect on total electricity consumption. Following the implementation of the subsidy phase-out, this effect gradually weakened, leading to a decrease in grid purchases. This finding suggests that households adjusted their electricity usage patterns to maximize revenue from solar electricity. In the long term, households are more inclined to generate revenue by selling solar electricity to grid companies during the daytime. This shift in behavior is expected to reshape their electricity usage habits over time. Our findings contribute new insights to the growing body of literature on household consumption and provide practical foundations for the renewable energy market and public policy development.